Marissa Mayer named CEO of Yahoo for turnaround bid

Marissa Mayer has been hied by Yahoo as its third chief executive within the past year, a move which is expected to see the company sharpen it's focus on technology and products. (July 17, 2012) Photo Credit: Getty Images

Yahoo! Inc. (YHOO) named Marissa Mayer as chief executive officer, appointing a technologist who has managed some of Google Inc. (GOOG)’s most popular products to help stem user defections and reverse market-share losses that fueled three years of sales declines at the biggest U.S. Web portal.

Mayer, a 13-year Google veteran, takes the helm today, just as Yahoo prepares to report second-quarter results after the close of trading. She replaces Ross Levinsohn, who ran Sunnyvale, California-based Yahoo on an interim basis after Scott Thompson resigned in May over inaccuracies in his resume.

In hiring Google’s Mayer, 37, the Web portal turns to the company that unseated it as the Web-search leader and played a central role in Yahoo’s decline. The new CEO is an engineer skilled at designing and tailoring products to customers’ tastes, yet she lacks experience in running a large business and courting big advertisers.

“What she did at Google was really focus on the user experience more than anything else; Yahoo does need that,” said Benjamin Schachter, an analyst at Macquarie Securities USA Inc. “But it needs many other things as well. The fact that she had not been a CEO before certainly raised some eyebrows.”

Yahoo shares jumped in late trading yesterday after her appointment was made public, rising to as high as $16.62. They had fallen less than 1 percent to $15.65 at the close in New York, and through yesterday declined 3 percent this year.

Yahoo’s Challenges
In German trading today, the stock climbed 1.8 percent to the equivalent of $16.07 as of 11:14 a.m. in Frankfurt.

Mayer, who became Google’s 20th employee and its first female engineer, is credited with maintaining the company’s Spartan home page for a decade and overseeing such products as Gmail, Google News, and image, book and product search. In 2010, she became vice president of local, maps and location services.

Yahoo’s biggest challenges include adapting the Web company to a shift toward mobile devices and getting users to visit its pages more often, Mayer said in an interview. She said she will draw on experience that ranges from developing products to helping start AdWords, the business that helps companies insert ads alongside Google’s search results.

“It’s going to be a lot of hard work,” Mayer said. “My focus has always been on users and creating innovative and compelling end-user experiences -- and being very focused on excellent technology and great design.”

Mayer will also juggle her role as CEO with being a new mother. She said on her Twitter page that she and her husband, Zachary Bogue, are expecting a baby boy. The information was confirmed by Yahoo.

Co-founded by Jerry Yang and David Filo in 1995 when the pair were doctoral students at Stanford University, Yahoo was once the world’s most popular website, with a market capitalization greater than $100 billion. Yahoo lost its luster in recent years as Google snared a larger share of the search- advertising market and Facebook Inc. captured the attention of people seeking a more social experience on the Web.

Visitors on average spent less than two hours, 15 minutes on Yahoo pages in March, compared with more than six hours for Facebook, according to ComScore Inc.

The declines have sent advertisers into the arms of competitors. Yahoo’s share of the U.S. online display-ad market will shrink to about 8 percent in 2014, while the combined share for Google and Facebook will widen to about 39 percent, according to EMarketer Inc.

For all her accomplishments at Google, Mayer wasn’t included in the senior-management team set up by Larry Page last year soon after he took the helm. Under Eric Schmidt, Page’s predecessor, she had been a member of Google’s operating committee, the company’s most senior management group.

“From a career standpoint, from a legacy standpoint, she seemed unlikely to go beyond where she was at Google,” said Allen Weiner, an analyst at Gartner Inc. in Austin. “In order to reach the next level, she would have to go elsewhere.”

Mayer, in the interview, said she wasn’t expecting to be included in Page’s senior circle. She had only recently assumed oversight of maps and local, she said.

“It was too early in my time there,” Mayer said. “I’ve never been very focused on titles. I’ve always been much more focused on impact and user services.”

In her new position, Mayer performed well, said Sameet Sinha, an analyst at B. Riley & Co. Her responsibilities included integrating local services with Google+, a social- networking tool that vies with Facebook. She also helped spearhead the acquisition of Zagat Survey LLC.

“Local was a business that Google had struggled with for many years, and she was given the role to turn it around and make it a real business going forward,” Sinha said. “She was doing all the right things -- simplifying the structure, making it easy for small or local business to interact.”Page himself praised Mayer, saying, “Marissa has been a tireless champion of our users. We will miss her talents at Google.”

As CEO, Mayer also will need to bring stability to a management team wracked by upheaval. Yahoo’s Levinsohn had stepped in on May 13 when Thompson left after failing to fix errors in his academic record. Thompson, former president of EBay Inc.’s PayPal, took the helm in January from Tim Morse, who became interim CEO in September. Morse followed Carol Bartz, who was fired last year.

Yang Criticized
Bartz had succeeded Yang, who was CEO from June 2007 to January 2009. Yang faced criticism from investors, including Third Point LLC CEO Daniel Loeb, for rebuffing an acquisition offer for as much as $47.5 billion from Microsoft in 2008.

Mayer is distinguished for an ability to nurture talent, said Chris Sacca, founder of Lowercase Capital LLC and former head of special initiatives at Google. That includes Yahoo’s efforts to catch up in social networking.

“I have never seen anyone invest as much in developing the talents within her team as Marissa does,” Sacca said in an e- mailed statement. “All told, her style is meritocratic and clear.”

Her selection puts Mayer among a small club of women who run publicly traded technology companies. The list includes Meg Whitman, CEO of Hewlett-Packard Co. and Ginni Rometty at International Business Machines Corp.

An engineer and patent holder who earned a bachelor’s degree in symbolic systems and a master’s degree in computer science from Stanford University, Mayer stands apart from female CEOs who boast business degrees.

‘Street Credibility’
“Marissa has a lot of street credibility with product managers and engineers, which significantly increases Yahoo’s chances of attracting the right technology talent,” said Doug Garland, a former vice president at Google and senior vice president at Yahoo, who’s now the chief revenue officer at music-discovery service Shazam Entertainment Ltd.

She also has acted as a public face of Google, often speaking at conferences, and serves on the boards of Wal-Mart Stores Inc. (WMT) as well as such nonprofits as the San Francisco Museum of Modern Art and the New York City Ballet.

“I worked with Marissa for many years -- she’s a great product person, very innovative and a real perfectionist who always wants the best for users,” Google Executive Chairman Eric Schmidt said in an e-mailed statement. “Yahoo has made a good choice and I am personally very excited to see another woman become CEO of a technology company.”